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Westpac CEO believes Australia now pulling out of cost of-living crisis Westpac CEO believes Australia now pulling out of cost of-living crisis
(1 day later)
Anthony Miller says worst of inflation-induced pressure on borrowers is easing, while framing Labor re-election an ‘enormous positive’Anthony Miller says worst of inflation-induced pressure on borrowers is easing, while framing Labor re-election an ‘enormous positive’
Westpac’s chief executive believes Australia may be recovering from the depths of the cost-of-living crisis and has hailed the re-election of the Albanese government as an “enormous positive” for the country.Westpac’s chief executive believes Australia may be recovering from the depths of the cost-of-living crisis and has hailed the re-election of the Albanese government as an “enormous positive” for the country.
Anthony Miller said on Monday the worst of the inflation-induced pressure on borrowers was easing, as the share of customers falling behind on repayments fell.Anthony Miller said on Monday the worst of the inflation-induced pressure on borrowers was easing, as the share of customers falling behind on repayments fell.
“We may have passed the low point in the cycle,” he said.“We may have passed the low point in the cycle,” he said.
But the likelihood of an Australian recession has risen from 42.5% to 45%, Westpac predicted, as international markets stay on edge amid Donald Trump’s trade conflict.But the likelihood of an Australian recession has risen from 42.5% to 45%, Westpac predicted, as international markets stay on edge amid Donald Trump’s trade conflict.
Westpac posted a 1% drop in net profit for the six months ended March to $3.3bn, according to half-year results released on Monday.Westpac posted a 1% drop in net profit for the six months ended March to $3.3bn, according to half-year results released on Monday.
While the profit result underwhelmed investors, sending the bank’s share price down by more than 3% in early afternoon trading, the report showed early signs customers were facing less intense cost-of-living difficulties.While the profit result underwhelmed investors, sending the bank’s share price down by more than 3% in early afternoon trading, the report showed early signs customers were facing less intense cost-of-living difficulties.
The share of Westpac customers behind on repayments fell from its 1.45% peak to 1.36% over the six months to March, returning to levels reached a year ago.The share of Westpac customers behind on repayments fell from its 1.45% peak to 1.36% over the six months to March, returning to levels reached a year ago.
Just 0.86% of the lender’s Australian mortgage borrowers were more than 90 days behind on repayments, from 1.12% six months ago, while 90-day repayment delays on other consumer loans also fell.Just 0.86% of the lender’s Australian mortgage borrowers were more than 90 days behind on repayments, from 1.12% six months ago, while 90-day repayment delays on other consumer loans also fell.
The ease in cost-of-living pressures signalled by the major bank’s results was also evident in the federal election, with Labor re-elected after arguing that the economy had “turned the corner”.The ease in cost-of-living pressures signalled by the major bank’s results was also evident in the federal election, with Labor re-elected after arguing that the economy had “turned the corner”.
Miller said the government’s re-election provided stability to Australia against an uncertain global economic outlook.Miller said the government’s re-election provided stability to Australia against an uncertain global economic outlook.
“That certainty that the Labor party has provided over the last couple of years in government and now re-elected is an incredibly powerful outcome and a very positive one for the country,” he told investors and media on Monday.“That certainty that the Labor party has provided over the last couple of years in government and now re-elected is an incredibly powerful outcome and a very positive one for the country,” he told investors and media on Monday.
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“Getting things done methodically, as opposed to boldly going in different and new directions, is something to be thoughtful about.”“Getting things done methodically, as opposed to boldly going in different and new directions, is something to be thoughtful about.”
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Household and business spending are expected to take over from government activity to drive stronger economic growth as the share of borrowers behind on debt shrinks, the bank’s half-yearly report showed.Household and business spending are expected to take over from government activity to drive stronger economic growth as the share of borrowers behind on debt shrinks, the bank’s half-yearly report showed.
While lower rates of stressed or impaired debt would have meant Westpac could provision less money to cover potential losses, Miller said shocks and volatility in other countries made global borrowing riskier.While lower rates of stressed or impaired debt would have meant Westpac could provision less money to cover potential losses, Miller said shocks and volatility in other countries made global borrowing riskier.
The bank’s chief financial officer, Michael Rowland, said: “We’ve got a lot of global uncertainty, and we’ve increased the downside [likelihood] to cope with that [but] all the forward-looking economic indicators [are] not telling us we’re going to have a downturn in the future.”The bank’s chief financial officer, Michael Rowland, said: “We’ve got a lot of global uncertainty, and we’ve increased the downside [likelihood] to cope with that [but] all the forward-looking economic indicators [are] not telling us we’re going to have a downturn in the future.”